SWEDEN - AP3, Sweden's third national pension fund posted a 3.4% drop in the 1H value of its holdings.
In its report the Stockholm-based fund reported how its initial portfolio of SEK134bn fell to SEK 131.5bn in six months, a sum that included a net inflow of pension contributions amounting to SEK2.1bn.
The fund added that the negative returns could be attributed to its overweighting in equities during most of this year. The return on the Swedish equity portfolio amounted to -10.8%. Other portfolios generated returns at about the level of their respective benchmarks, according to AP3.
Tomas Nicolin, AP3’s chief executive said that he was “satisfied that the necessary transition of the assets under our management is now completed” following an asset/liability modelling (ALM) study.
The ALM resulted in a portfolio of 49% equities, 37% fixed income, 7% real estate and 7% index-linked bonds. About 45% of the reference portfolio consists of domestic assets, while the rest is invested abroad. Foreign assets now amount to SEK60bn of the total portfolio.
About 8% of the fund was exposed to foreign currency risk; AP3 has a maximum limit for foreign currency exposure of 15%. However, it met with a 1H volatile SEK market, weakened against both the dollar and the euro.
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